TOKYO (Reuters) - Japan's Nikkei stock average surged to a seven-year high and the yen tumbled to its lowest since early 2008 against the US dollar on Friday as the Bank of Japan caught markets flat-footed with its surprise monetary easing decision.

The Nikkei surged over 5 per cent to hit 16,455.84, its highest since November 2007. The dollar jumped more than 1 per cent to hit 110.69 yen , its highest since January 2008.

The euro rose to 138.44 yen from 137.79 yen in earlier Tokyo trade and 137.75 yen in New York. The single European currency fetched $1.2591 against $1.2612 in US trade.